Why Is Wall Street So Bullish on Shopify (SHOP)? There's 1 Key Reason.

Higher revenue helped return the business to positive operating income. During the five-year period leading up to its all-time high in November 2021, shares of Shopify (NASDAQ: SHOP) had surged 3,740% higher. The business was lifted by the pandemic as online shopping saw huge demand. This e-commerce stock might've diverged from reality, though. Shares tanked in 2022, but now they're back on the upswing. In the past three years, the stock has rocketed 456% higher (as of Oct. 10). Why is Wall Street so bullish on Shopify? There might be one reason. Investors are extremely optimistic thanks to durable growth that has accelerated. After the pandemic boom, Shopify's revenue increased by more than 20% in 2022, 2023, and 2024. And sales growth of 31% in the second quarter (ended June 30) was faster than the pace in the first quarter. Gross merchandise volume continues to march higher, totaling $88 billion last quarter. This is a clear sign that the business has a very bright future as it further penetrates the e-commerce market on a global level. Shopify's impressive top-line growth has now resulted in profits. Operating income totaled $291 million in Q2. Not too long ago, this was a money-losing enterprise. It's become more financially sound. Investors shouldn't rush to buy shares just yet. Shopify is a great company, but the stock prices in very lofty expectations. Before you buy stock in Shopify, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Shopify wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $657,979!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,122,746!* Now, it's worth noting Stock Advisor's total average return is 1,060% -- a market-crushing outperformance compared to 187% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.

Why Is Wall Street So Bullish on Shopify (SHOP)? There's 1 Key Reason.

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